China’s Central Bank Admits Surging Price Of Bitcoin Has Boosted Interest In Digital Yuan

China's Central Bank Admits Surging Price Of Bitcoin Has Boosted Interest In Digital Yuan

China’s Central Bank seems to have noticed a spike in the interest rate of residents towards the country’s Digital Yuan.

The project is expected to help China join in the digital race by replacing a significant number of its fiat with the digital Yuan.

The people’s bank of China credits CBDC Interest rate to Bitcoin

If the Chinese Digital Currency becomes a success, part of the credit is Bitcoins’ to take, according to Wang Xin, the research bureau director at the People’s Bank of China. According to CNBC who translated his comments from Mandarin to English, Xin can be quoted saying;

“On one hand, this is related to more and more central banks in the world participating in the development of domestic digital currencies.”

Xin disclosed that the rising interest in the country’s incoming digital Yuan may be a result of other countries introducing a national digital currency.

But Wang is not giving all the credit to the aforementioned. Despite the country’s Bitcoin ban remaining functional to date, Xin asserts that the spike and bitcoin’s price may have influenced interest rates just as much.

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“On the other hand, this (interest) may also be related to the large increase in the price of bitcoin.” He revealed.

At present, there’s no official date for the launch of the Chinese Digital Yuan, but the country intends to continue accelerating pilot projects that give residents of different parts of the country an opportunity to test the currency at retail shops. As Xin says, “Next, we will push ahead with digital RMB pilots, and accumulate more experience.”

CBDC – a threat to Bitcoin?

The integration of a Central Bank Digital Currency has become popular amongst many countries that are essentially looking to go digital.

Since 2020, there has been an uptick in activities aimed at accelerating the process of bringing CBDC to life. Countries like Japan, Sweden, Switzerland, and the United Kingdom, have begun to research, test, and explore CBDC.

The Bahamas was the first to debut a Central Bank Digital Currency, which is called “the sand dollar.” The Central Bank disclosed that the digital dollar is intended to facilitate “inclusive access to regulated payments and other financial services.”

The integration of CBDC has turned out to be a success for the Bahamas so far, as Mastercard recently collaborated with the Central Bank, to allow users to “convert the digital currency to traditional Bahamian dollars and pay for goods and services anywhere Mastercard is accepted on the Islands and around the world.”

There has been a fuss about a possible competition between CBDC’s and independent digital currencies like Bitcoin. However, because Bitcoin offers a level of decentralization that CBDC’s lack, the Bitcoin community is optimistic that these currencies will not outpace Bitcoin.